Correlation Between Cahayaputra Asa and PT Indonesia
Can any of the company-specific risk be diversified away by investing in both Cahayaputra Asa and PT Indonesia at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Cahayaputra Asa and PT Indonesia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cahayaputra Asa Keramik and PT Indonesia Kendaraan, you can compare the effects of market volatilities on Cahayaputra Asa and PT Indonesia and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Cahayaputra Asa with a short position of PT Indonesia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cahayaputra Asa and PT Indonesia.
Diversification Opportunities for Cahayaputra Asa and PT Indonesia
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Cahayaputra and IPCC is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Cahayaputra Asa Keramik and PT Indonesia Kendaraan in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PT Indonesia Kendaraan and Cahayaputra Asa is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Cahayaputra Asa Keramik are associated (or correlated) with PT Indonesia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PT Indonesia Kendaraan has no effect on the direction of Cahayaputra Asa i.e., Cahayaputra Asa and PT Indonesia go up and down completely randomly.
Pair Corralation between Cahayaputra Asa and PT Indonesia
Assuming the 90 days trading horizon Cahayaputra Asa Keramik is expected to generate 0.38 times more return on investment than PT Indonesia. However, Cahayaputra Asa Keramik is 2.62 times less risky than PT Indonesia. It trades about -0.11 of its potential returns per unit of risk. PT Indonesia Kendaraan is currently generating about -0.07 per unit of risk. If you would invest 14,900 in Cahayaputra Asa Keramik on September 27, 2024 and sell it today you would lose (300.00) from holding Cahayaputra Asa Keramik or give up 2.01% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Cahayaputra Asa Keramik vs. PT Indonesia Kendaraan
Performance |
Timeline |
Cahayaputra Asa Keramik |
PT Indonesia Kendaraan |
Cahayaputra Asa and PT Indonesia Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Cahayaputra Asa and PT Indonesia
The main advantage of trading using opposite Cahayaputra Asa and PT Indonesia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cahayaputra Asa position performs unexpectedly, PT Indonesia can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in PT Indonesia will offset losses from the drop in PT Indonesia's long position.Cahayaputra Asa vs. PT Indonesia Kendaraan | ||
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Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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